The traffic in the trade dropped by around one-fifth since 2014. After southbound container flows into West Africa dropped by 10% in 2015 to 1.3 million TEU, the number further decreased by 12% in 2016 to 1.2 million TEU, and early 2017 numbers “are even worse.”
Drewry said that the figures for January 2017 “do not suggest that trend is going to reverse any time soon.” Southbound volumes for the month were down by 18% year-on-year, which has lowered the rolling 12-month average to 95,600 TEU/per month, down by 12.5% year-on-year.
With no immediate expectation of a demand recovery, carriers are trying to restrict the amount of capacity available through void sailings, although the cascade of bigger ships from other trades continues to undermine the effectiveness of that practise.
Despite the weak demand, spot rates along this route made a surprising upturn at the end of last year although some of the momentum dissipated in February. Average Asia to West Africa rates fell by around 12% month-on-month in February to reside at around USD 1,600 per 40ft container.
“With ships barely half-full on the southbound voyage it does not seem likely that carriers will be able to arrest the decline in the next few months,” Drewry said.